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HSI warrants in the limelight as index plunged

macquarie structured warrants 20200914

The overall warrants turnover surged last week, rallying 15.2% to RM273.8mil, largely contributed by the Hang Seng Index (HSI) warrants. Despite a shorter trading week for HSI warrants as the Hong Kong market was shut in conjunction with the Mid-Autumn festival, trading activity in HSI warrants remain active, recording a total trading value of RM155.5mil, representing 56.8% of the overall turnover. 

The Hong Kong’s benchmark index saw another lacklustre performance last week, falling for the second consecutive week to trade at the 24,000 level, tumbling 2.9% week-on-week (w-o-w) amid concerns about China Evergrande Group’s debt woes as a bond payment deadline passed without an update. The index started the week in the red, plunging 3.3% before rebounding 1.7% mid-week to trade above the 24,500-level. However, it couldn’t sustain the positive momentum and fell 1.3% to 24,192.16 points at the end of the week.

With the HSI’s turbulence and high volatility last week, the HSI warrants were once again in the spotlight. HSI call warrant, HSI-CIG was the most active in terms of volume traded as investors traded more than 142.6mil units and net bought more than 17mil units, while put warrant HSI-HG8 had the highest turnover with RM57.2mil traded. At the time of writing, the list of sold out warrants include HSI-CIF, HSI,CIG, HSI-CIK, HSI-CIL, HSI-CIQ, and HSI-CIU. Investors should take note that when warrants are close to sold out, the market maker may widen spreads by raising the offer price (or removing the offer price when a warrant is completely sold out). However, the bid price will be maintained at a fair price and will track the movement of the underlying price accordingly, allowing investors to sell back the warrants a fair price. 

Meanwhile, on the local front, call warrant over Greatech Technology (GREATEC), GREATEC-CJ was the top traded warrant among warrants over the Malaysian shares. This warrant recorded a total trading volume of 25.8mil units while call warrant over Dagang NeXchange (DNEX), DNEX-CG came in second with a total trading volume of 22.0mil units, extending another week of active trading among investors. GREATEC closed 2.0% up at RM7.50 last Friday while DNEX slid 2.4% to close at RM0.810.  

Top HSI warrants by turnover:

Warrant nameTurnover (‘mil.)IssuerExercise level/priceExpiry date
HSI-HG8RM57.2Macquarie24,40028 Oct 2021
HSI-CIVRM24.3Macquarie26,60028 Jan 2022
HSI-CIGRM20.5Macquarie26,60028 Oct 2021
HSI-HG7RM17.8Macquarie22,40028 Oct 2021
HSI-CILRM12.3Macquarie27,00029 Nov 2021

If you have any questions or need further assistance, please do not hesitate to contact us via our hotline at 03-2059 8840 or email us at [email protected]

To view the full list of structured warrants available on Bursa Malaysia, kindly visit malaysiawarrants.com.my

Provided for Malaysian residents information only. This commentary has not been reviewed by the Securities Commission Malaysia. It is not an offer or recommendation to trade and is not research material. Past performance is not indicative of future performance. You should make your own assessment and seek professional advice. The Warrants will not be offered to any US persons.

Asset Allocation – It matters for your investment!

Asset allocation matters for you

Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio’s assets according to an individual’s goals, risk tolerance and investment horizon

asset allocation matters

In layman’s terms, the objective of asset allocation is to diversify and maintain a certain level of returns by assigning your portfolio into different asset classes (the three main asset classes include equities, fixed-income and cash and equivalents). Do note that these different asset classes have different characteristics in terms of risk and return and are likely to behave differently over time. Besides the three main asset classes, property and commodities can be included in the portfolio as well.

Although there is no fixed rule to the right asset allocation for every individual, asset allocation will be one of the most important decisions one investor has to make, which eventually will determine the investment results at the end of the day.

Investors may use different asset allocations for different objectives. For example let’s see how it applies for Jessica, Kelly and Charlotte:

Jessica – who is saving for a new car in the upcoming 1-3 years

Kelly – who is saving for her kid’s education fund that will be needed in another 10 years.

Charlotte – who is saving for her retirement funds (greater than 20 years)

These individuals will have different styles of allocating their assets as their objectives are different. Jessica will be worried of short-term fluctuations, while Kelly or Charlotte may have time to ride out the market’s volatility and aim for long-term investing.

Having said that, risk tolerance plays a crucial factor as some individuals may not be comfortable to invest in stocks (generally perceived as having high volatility and risk) and opt for a more conservative allocation despite the distant horizon.

Rules to allocate your investment – Age-based asset allocation

There are plenty of asset allocation strategies which will work for different objectives. We will dissect the asset allocation strategies based on age groups for ease of understanding.

more equities!
20-30s (Jessica): This demographic should be able to take more risk and have plenty of time to ride out inevitable volatility in the market, thus many advisors would recommend holding 80-100% of equities in their portfolio.
mixing with something safer
40-50s (Kelly):   Under the middle age segment, as they are at the peak of their careers, earnings and commitments (kids’ education funds, parents’ expenses etc), generally, it is advisable to have a mixed portfolio of stocks to bonds ratio at 8-to-2 or 6-to-4.
asset allocation - matters for all
60s and above (Charlotte):  For this demographic, it is notable that stability is a crucial factor for them and hence, they might choose an asset allocation that is relatively stable, which has more fixed-income or cash as compared to equities. Thus, it would be wise to go for a fixed income asset class that fills up the portfolio around 20-40%, while stocks stand around 60-80% in their portfolio.

Again, these strategies are not fixed and may differ with each individual. As a general rule of thumb, the younger you are, the riskier the portfolio you would go for. For investors that have lesser risk appetite, they might tone down on the equities portion and put the rest under bonds or cash. At the end of the day, the idea of asset allocation is to balance the risk and reward of an investor by diversifying their assets to achieve a certain desired result.

Asset Allocation - A balanced investment strategy

Missed our last article on what to do when you don’t have time to invest? <<<Click here.

To open an account with M+ Online, visit our website here

5 Reasons Why Trading Isn’t Working for You.

5 Reasons Why Trading isn’t Working Out for You

Let’s face it, you’re probably here as you’re feeling lost and hopeless with your performance in the stock market. Fret not, you are not the only one facing these issues in the market. A staggering 90% of investors make losses in the market! Is it time to clear out that portfolio and get out of the market? Certainly not. The reason 90% of them fail is because of these 5 reasons we’re about to show you:

  1. Emotions

We definitely have got to start off with this one here. Many, many, many people fail to make a profit in the market due to their emotions affecting their decision-making when they are trading or investing. Here’s a great chart that depicts regular investors’ emotions in the market.

Source: wallstcheatsheet.com

Often times, whether in times of unrealised profit or losses, investors and traders start to act irrationally. They hope for the stock prices to go up when they’re at a bad loss or even when they’re already at a high! That is exactly what happens when you don’t stick to your plan, or worse, not even having one!This brings us to number 2.

  1. Not planning ahead

If you fail to plan, you are planning to fail.” – Benjamin Franklin

You’ve probably heard this quote at least once in your lifetime. Cliché as it sounds, planning is one of the most important elements of investing. If you are going into the market without a plan or trading strategy, you might as well invest in your friend’s, brother’s, wife’s, cousin’s new shady business.

To be a better investor, PLAN AHEAD. Have a strategy in mind before you invest. Know when to take profit, cut losses or hold on. Learn about how you should allocate your assets according to the situation. Plan ahead by looking at how the marketing is performing or how the company is performing. That way, when the time comes, you’llknow the decisions that you have made.

You can also tune into M+ Weekly Bites every Wednesday to get weekly market insights to help you with your planning:

https://www.facebook.com/watch/401900773181313/367996034414482

  1. Haven’t learnt the basics

Another reason why trading isn’t working out for you might be that you have yet to grasp the basics in the market. This means not knowing how to read technical charts, study a company’s financials or even understanding the various products in the market.

Candlestick charts and Financial Statements might seem really overwhelming to look at, but it is REALLY easier than you might think. So if you have yet to learn any basics, grab your phone, contact your broker today!

  1. Relying on TIPS

So learning the basics didn’t work out for you, so you cave into using tips or “trading ideas” from unlicensed sources (or even your aunt). By solely relying on stock tips, you are basically putting your portfolio at the risk of another’s idea. Did they even conduct the right and proper method of selecting the stock?

Here’s how dangerous it is to get investment advice from unlicensed sources:

https://www.sc.com.my/resources/media/media-release/sc-issues-cease-and-desist-order-to-seven-unlicensed-operators-offering-investment-advice

If you do want to get legit investment advice, do look for brokers that are licensed under the Securities Commission Malaysia.

  1. Not doing any research (or a proper one)

Well, you’ve overcome your emotions in trading, but you’re still not making a profit in the market. This might be the next concern that you should be looking at. Before buying a stock, it is of utmost importance to do some research on the company and look at its chart (if you’re a TA person).

Here are some pointers:

  1. Is the industry/company currently in trend with the market?
  2. Are the financials strong?
  3. Are there any opportunities ahead for the company’s growth?
  4. What are the target price and cut loss points that you should look at?

If you do need help on what else you can look at to improve your research skills, you can tune in to our live webinars on Facebook: https://www.facebook.com/mplusonline/videos

In conclusion, trading/investing isn’t hard nor easy, but you just have got to plan ahead and make the right decisions or calculated risks before entering the market. Now go out there and start your trading journey!

Ready to start your journey? Visit https://registration.mplusonline.com

Disclaimer: This article is for general information only and is not a recommendation, offer or solicitation to buy or sell any investment product. Investments are subject to investment risks. The risk of loss in stock trading can be substantial and you could lose your initial capital. Do seek a licensed broker before you engage in any trading activity.

Starting Small

We just want to put it out there that no amount is too small to invest. You don’t necessarily have to dump in a lot of capital into whatever you are investing for starters. You just have to start somewhere. Sure, you may not be able to purchase a property with only a couple thousand bucks but there are plenty of other investment options out there such as Robo-advisors, capital gains, dividends etc to help you slowly kick-off your investment journey.

You can start by saving a certain percentage of your income every month (even if it may be a couple of hundred ringgit), and instead of letting it sit idle in your account that will not make your money grow, invest it and let it work for you. This requires some amount of discipline if you are used to using up all you have in your account before the next paycheck, but if you start making it a habit, it will eventually become your lifestyle.

Bear in mind that you can only learn if you have some skin in the game; you can’t just sit by the bleachers, wanting to watch what happens first before getting down and dirty. Investing is very much like a sport game: you can only get better if you practice, learn the ropes to grasp multiple concepts before you can build your confidence to invest more (wisely) and diversify your portfolio.

There are of course advantages and disadvantages to starting small:

Aside from slowly saving up, you could also begin your journey by reading up books and articles about investments. This will help you understand investing better and give you the confidence to let your money go and grow. You may follow our Facebook Page to get the latest posts and market insights to understand the stock market better if that is where you want to start with. Once you’ve levelled up, you may get an even deeper insight on stocks by studying the reports by our research team

To open a CDS account with M+ Online visit https://registration.mplusonline.com

Start now and start somewhere.

What’s Trending (3rd May 2021)

The US financial markets continued its upward climb with the support of better than expected financial results, and optimism that the economy may be gradually shifting back into gear after being clouded by virus concerns for more than 1-year. Bond yields also climbed marginally higher towards the end of the month after staying quiet for the earlier part of the month. Conversely, the equity market in China took a hit when the government decided to crackdown on the tech sector.  On a broader scale, global financial markets had ended the month on a mixed note, while Gold price clawed back gains with the support of unresolved uncertainties.

In The News

  • Vaccination exercises has been taking place on a grand scale as governments worked together to combat the pandemic that has crippled the global economy for more than 1-year.  While many have seen a steady downward trend in number of infections since the start of the vaccination, India has made an appeal for help after suffering from record high cases, which has led to a collapse in its healthcare system. 
  • India’s equity market ended the month as one of the weakest performers in the region as it tumbled 4.9% lower in MYR terms. Its global counterparts have been banding together to provide support as the country battles with the virus – the US, Britain, and France already pledging to send in aid. 
  • Did you know that the S&P 500 Index saw its 5th consecutive monthly gain in April? Optimism surrounding earnings announcements had boosted consumers’ sentiment to push the performance of US equities higher.  There was mixed performance from the tech sector, with Facebook, and Alphabet launching ahead after reporting strong earnings and revenues.  The broader Nasdaq Index ended the month as one of the strongest performers with a 5.4% price gain in MYR terms in April. The NYSE FANG+ Index was a close runner up with a 5.1% rise over the same period, which contributed to the 0830EA’s gain of 8.9%. 
  • Global recovery is expected to continue as economies reopen their doors for business. US economist are already anticipating a double digit recovery for its consumer services. And to keep with the momentum, the US Feds have reiterated that rates will be kept low for the near-term, with no plans on pulling back the asset purchase program.
  • Over in China, crackdown on the tech sector dampened investor’s sentiment. The government imposed a wide-range of restrictions on some of the largest tech companies in China, including Tencent, Bytedance, JD.com, as well as Meituan Dianping. 
  • The consumption-focused S&P New China Sectors Ex A Share Index managed to eek out a 0.1% gain in price over the month of April, which contributed to the 0829EA ending in the green. 
  • Investors had largely stayed on the sidelines as many companies were delaying the release of their financial results – leaving investors to see a slew of suspended companies being scattered across the markets. 
  • Political uncertainties remain a stumbling block for Malaysia, with ongoing feud between fractions and parties keeping investors at bay. With more than 3,000 cases being reported daily, the rapid rise in number of cases has also left the Rakyat questioning if another movement control order would be on the cards to reduce pressure on the domestic healthcare sector. 
  • The local bourse is now down 1.6% YTD in MYR terms, while the 0836EA, which tracks 20 of the strongest momentum companies in Malaysia has managed to maintain a respectable 4.8% gain over the same period. 
  • With new strains of the virus being discovered, and global economies grappling to keep the virus at bay, uncertainties have continued to loom over global markets – leaving Gold price to steadily inch higher.  The 0828EA climbed 3.4% over the month in MYR terms as demand for Gold rose as investors took on a more cautious approach to safeguard the value of their assets. 

On the Economic Data Front

  • US economy back on track?
    • GDP for 1Q2021 was reported to have expanded at 6.4%. 
    • Unemployment rates improved with weekly jobless claims falling to pre-pandemic numbers.
  • Has China peaked?
    • China recorded a record 18.3% YoY GDP growth in 1Q2021
    • Though falling marginally, official manufacturing PMI remains in expansionary stage with a reading of 51.1 (down from 51.9 in March)
    • Caixin/Markit manufacturing PMI rises to an 11-month high of 51.9 in April – it’s strongest activity since December 2020.
    • Official composite PMI dips to 53.8 in April, from 55.3 in March

ETF strategies at TradePlus

A look at the performance of TradePlus ETFs ,and major global indices 

Email disclaimer: This information has been provided for information purposes for the intended recipients only.  Information contained should not be copied, distributed, or otherwise disseminated in whole or in part without written consent from Affin Hwang Asset Management Berhad (“AHAM”). Information contains opinions, analysis, forecasts, projections, and expectations which has been obtained from various sources, including those in the public domain, and are merely expressions of belief. AHAM makes no expressed, or implied warranty as to the accuracy and completeness of any such information.  As with any forms of financial products, the financial products mentioned herein (if any), carries with it various investment risks. AHAM is not acting as an advisor or agent to any person to whom this communication is directed. Such persons must make their own independent assessments. Nothing in this communication is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities.  Neither AHAM, nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence, or negligent misstatement) from any statement, opinion, information, or matter (expressed or implied) arising out of, contained in, or derived from, or any omission from this communication, except liability under statue that cannot be excluded.  You may obtain further information regarding product details, risks, and full disclaimers for TradePlus products and its Benchmark Indices here.

Warrants over glove makers remain in the spotlight

macquarie structured warrants 20200914

The third week of August saw the overall warrants turnover dropping by 9.7% to RM930.5mil, largely due to a shortened trading week in conjunction with Awal Muharram on Thursday. Warrants over Malaysian shares remained the major contributor to the total warrants turnover for the week making up approximately 95.2% of total warrants turnover at RM885.8mil, followed by warrants over the Hang Seng Index with RM38.0mil (4.1%) and other index warrants which made up the balance.

Despite it being a holiday shortened week, warrants over glove makers Supermax Corporation and Top Glove Corporation still dominated the warrants space. Trading interests remained high especially after both names posted a sharp rebound on Tuesday to recoup most of their previous week’s losses. Supermax and Top Glove ended 22.2% and 17.6% higher for the week respectively, buoyed by aggressive buying activities.

With the steep surge in prices and trading interests in the underlying, call warrants SUPERMX-C1A and SUPERMX-C1D were both the second and third most actively traded warrants last week with up to 72.6mil and 59.8mil units traded respectively. SUPERMX-C1A was also the top warrant by value with up to RM93mil in total traded value. Other popular warrants were TOPGLOV-C87 and SUPERMX-C97 which occupied the fourth and fifth spots in the most active list with 59.4mil and 55.9mil units traded, respectively.

Meanwhile on the foreign front, the Hang Seng Index (HSI) futures saw yet another choppy week. The spot month August futures kicked off the week with an upbeat momentum but lost its steam to tumble a total of 2.6% from Wednesday through Thursday, only to bounce 1.6% on Friday, finishing the week little changed at 25,069.0. The volatile week saw the put warrant HSI-HAT topping the most active list with a total 72.7mil units exchanged hands despite it being close to expiry. This warrant along with 5 other HSI warrants will expire on Friday, 28 August 2020 with the last trading date on Wednesday, 26 August 2020. Other HSI warrants that were also actively traded by investors were call warrants HSI-C9U (expires October 2020) and HSI-C9T (expires August 2020).

Top warrants by volume traded:

Warrant nameVolume
(mil.)
IssuerExercise level/priceExpiry date
HSI-HAT72.7Macquarie24,20028 Aug 2020
SUPERMX-C1A72.6CIMB9.0029 Jan 2021
SUPERMX-C1D59.8CIMB22.0026 Feb 2021
TOPGLOV-C8759.4CIMB26.0026 Feb 2021
SUPERMX-C9755.9Maybank7.8826 Feb 2021

If you have any questions or need further assistance, please do not hesitate to contact us via our hotline at 03-2059 8840 or email us at [email protected]

To view the full list of structured warrants available on Bursa Malaysia, kindly visit malaysiawarrants.com.my

Provided for Malaysian residents information only. This commentary has not been reviewed by the Securities Commission Malaysia. It is not an offer or recommendation to trade and is not research material. Past performance is not indicative of future performance. You should make your own assessment and seek professional advice.

Rotational moves in the Market

We have been monitoring the retailers’ trading participation over the past week, the 5-day average participation rate continued to stay above the 45% (at one point it touched the 48.2% level). This is considered euphoric to us, but we think selectively there are still plenty of opportunities on Bursa Malaysia stock exchange. We have handpicked some counters throughout this week and one of them has performed well. The essence of our M+ Wiz is to pick some thematic stocks and let the strategy trigger it on a real-time basis, translating to real time opportunities for the traders. 

On the stock MINHO, we have put it on our daily list on the 12th of August. It has been triggering a few rounds before the strong rally. 

Let us show you why we pick lumber/ timber related stocks as one of the picks that day.

We have spotted the Lumber futures (figure below) in CME continue to charge strongly towards the all-time-high (and without taking a pause yet). Hence, we think it may trickle down towards timber/ logging industry stocks in Malaysia. 

LUMBER – All time high amid strong demand

Source: Investing.com

Given the clear direction for lumber futures, we searched for stocks under the related sector and found out MINHO could be a decent pick given that he has not moved yet and steadied along the range of RM0.23-0.26 over the past 3-4 months period. 

MINHO – Just before the rally with some improvements in volumes

MINHO – It has triggered buy on the day and the following trading days 

Source: M+ Wiz

In our M+ Wiz Pro Official Support Channel (Telegram), we have also highlighted on MINHO

So with us understanding the situation of the catalyst and storyline for the stock, coupled with the proprietary strategy being in the back bone of M+ Wiz, we are fairly confident it will select timely trading opportunities for us moving forward. 

We will continue using M+ Wiz to monitor for opportunities and provide traders a more systematic approach for their trading journey. 

We would like to highlight that these examples above are not a suggestion for a BUY or a SELL recommendation and it is more for a case study reference material for the future. 

Get in time for your stock with M+ Wiz!

For a limited time only, subscribe to wiz and get a 20% discount.

To subscribe visit Wiz Pro , key in WIZPRO20 at checkout.

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